There is a pretty good reason that both Fannie Mae (FNM) and Freddie Mac (FRE) are referred to in familial terms by the majority of the financial press -- usually, what one GSE ends up doing inevitably becomes what both GSEs do; reporting on one has often meant repeating the same coverage for the other. If recent data is any indicator, however, it may be time to re-examine some of those long-held assumptions. In the midst of a historic housing crisis and the green light from regulators to ramp up their mortgage portfolios, long-standing second fiddle Freddie Mac has been seen regularly blowing by its historically larger GSE cousin as of late, at least in terms of its mortgage investment activity. In a monthly summary, Freddie Mac said Wednesday that its retained portfolio hit the highest level ever during May, reaching $770.4 billion as it continued purchasing at a torrid pace. Fannie Mae's gross mortgage portfolio stood at $736.9 billion at the end of May, according to its monthly volume summary -- not exactly a smal total, of course, but the fact that Fannie's investment portfolio has now trailed behind Freddie's for two months suggests a key strategic difference at each company. Freddie Mac's retained mortgage portfolio grew at an annualized 53.4 percent rate during May, made all the more amazing given the 42.2 percent annualized rate the GSE had posted previously in April; Fannie Mae's portfolio grew at a 15 percent rate in May, by way of contrast. Freddie's retained purchases surged to more than $46.1 billion, up from $36.9 billion one month earlier, while Fannie's retained commitments actually fell to $24.5 billion from $30.7 billion in April. Fannie looks to securitization support It's a difference that certainly isn't lost on market participants, who told HW Thursday morning that Fannie Mae is likely looking to focus on issuing securities, rather than making purchases for its retained portfolio. The numbers bear out that strategy as well: Fannie's worst month for issuances thus far in 2008, during March, saw the GSE issue $50.1 billion -- a number that still manages to trump Freddie best month for securitization activity (May 2008, at $47.3 billion). Twice this year, Fannie Mae has already topped the $60 billion monthly issuance ceiling, after doing so only twice during all of last year. While neither GSE is commenting on its market strategy publicly, the numbers thus far seem to paint a picture of two institutions responding in two very different ways to a housing crisis they're increasingly being expected to help solve. Investors are responding to each company's differing activities, however, as if they were doing the same thing; in particular, investors are responding as if risk is increasing regardless of the channel used. Credit-default swaps tied to each GSE rose 3 basis points yesterday to 153 basis points, and have jumped 60 basis points the past five weeks, according to a report by Bloomberg News. Disclosure: The author held no positions in FNM or FRE when this story was originally published. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.